The DIC Group is one of the leading investors in the German market for commercial real estate

Press Release

DIC Asset AG: FFO rise by 55% - Strong and Successful First Quarter of 2020 Backs Current Full-year Forecast

Frankfurt, 30.04.2020

• FFO rise by 55% to EUR 26.4 million
• Property management platform grows to EUR 8.4 billion in assets under management
• Both segments combined show 6.0% like-for-like rental growth
• Latest forecast of EUR 94-96 million in FFO confirmed
• COVID-19: Focus on safety of staff and continued business operation - close communications with tenants, primarily in the retail and hotel sectors

 

Frankfurt am Main, 30 April 2020. DIC Asset AG (ISIN: DE000A1X3XX4), one of Germany's leading listed property companies, published its consolidated financial statements for the first quarter of 2020 today. The year 2020 has been off to an excellent start for the company, even though the business activities toward the end of the first quarter were visibly impacted by the COVID-19 pandemic. While health and safety of the employees take top priority, it is of key importance to the company to ensure a safe and constant business operation and a responsible interaction with all of its stakeholders. Based on the excellent figures for the first quarter, DIC Asset AG confirms its forecast for the 2020 financial year, which had been updated on 3 April of this year.

Sonja Wärntges, CEO of DIC Asset AG, commented: "We were strongly preoccupied with the COVID-19 crisis during the final weeks of the first quarter, and this continues to be the case. Our top priority is to take good care of our employees. In addition, we have intensified the dialogue with affected tenants and are in close contact with our stakeholders. With our regional presence and our excellent motivated staff, we maintain our full capacity to act even in the exceptional current situation, and our responsiveness remains crisp. The highly successful first quarter gives us confidence to meet our annual targets for 2020. Given our operational strength, we see ourselves in a good position to match the robust performance level of last year even under the currently difficult conditions. Reasons for our most recent confirmation of the dividend proposal for the 2019 financial year include not least our solid business model with its two earnings pillars as well as our robust liquidity situation."
 

Q1 2020 with Strong Figures as planned

- As of 31 March 2020, the assets under management of the real estate platform as a whole had increased to a total of EUR 8.4 billion - a 50% increase compared to the prior-year figure (31 March 2019: EUR 5.6 billion). Out of this total, the Institutional Business accounts for EUR 6.5 billion (31 March 2019: EUR 3.9 billion) and the Commercial Portfolio for EUR 1.9 billion (31 March 2019: EUR 1.7 billion).

- The letting performance of the platform as a whole equalled 37,100 sqm at the end of the first three months, breaking down into 24,600 sqm in renewals and 12,500 sqm in new lettings. Like-for-like, the combined annualised rental income of the two segments Commercial Portfolio and Institutional Business rose by 6.0% as of the reporting date.

- The gross rental income increased by 6% to EUR 26.0 million (previous year: EUR 24.5 million) as a result of consistent asset management and despite the year-on-year drop in the number of properties held in the Commercial Portfolio.

- Real estate management fees more than doubled as they rose to EUR 20.4 million (previous year: EUR 9.2 million). In addition to the increase in transaction and performance fees to EUR 13.6 million (previous year: EUR 5.7 million), this is attributable to the increased fees for asset and property management as well as for development services, which the steady expansion of the assets under management base brought up to EUR 6.8 million (previous year: EUR 3.5 million).

- FFO rose by 55% to EUR 26.4 million (previous year: EUR 17.0 million), driven primarily by the significant increase in income from property management, higher net rental income and an improved net interest result of EUR -7.1 million (previous year: EUR -8.6 million), the latter being primarily attributable to the repayment of the 14/19 bond (coupon rate: 4.625%) and the issuance of promissory notes (average interest rate: 1.55%) during the second half of 2019.

- The LTV ratio (loan-to-value) - warehoused assets not included - dropped to 45.0% as of 31 March 2020 (31 December 2019: 47.8%). Cash and cash equivalents totalled EUR 342.0 million as of the reporting date (31 December 2019: EUR 351.2 million). All in, maturities totalling c. EUR 103 million in 2020 and c. EUR 72 million in 2021 will be up for refinancing.

 

Annual forecast for 2020 confirmed: Overall, the company expects EUR 94-96 million in FFO, EUR 94-98 million in gross rental income, and EUR 80-90 million in real estate management fees. On the acquisition side, it expects to spend a total of EUR 700 million to EUR 1.1 billion, thereof EUR 200 million to EUR 300 million for the Commercial Portfolio and EUR 500 million to EUR 800 million for the Institutional Business segment. Out of the planned disposals, which add up to EUR 400 million, assets from the Commercial Portfolio account for c. EUR 100 million, assets from the Institutional Business for c. EUR 300 million.

 

DIC Strategy "Getting through the COVID-19 pandemic together"
DIC Asset AG maintains an active dialogue with more than 300 tenants directly affected by the shutdown, most of them belonging to the retail and hotel sectors in both segments. Our primary goal is finding economically sustainable individual solutions for both sides, i.e. temporary waiving of rents for prolongation of rental contracts. Gradual opening of businesses at the moment enables generating revenues again. In individual cases, possible concepts for subsequent use are developed as a precaution. The forecast dated 3 April 2020, which was confirmed today, already reflects - from today's point of view - the most realistic scenario that factors in a lower transaction volume and, as a result, both a lower rental income and a drop in transaction-related as well as in recurring real estate management fees.

Invitation to Attend Investor Call / Webcast on 30 April 2020

The Management Board of DIC Asset AG invites you to attend the presentation of the financial statement for the first quarter of 2020 on 30 April 2020 at 10.00 CEST.

Please use the numbers below to dial in: Dial-in numbers:

Germany: +49 (0)32 214219744
United Kingdom: +44 (0)20 8089 4223
United States: +1 334-777-6981

The confirmation code is: 913586#

The webcast (incl. Replay) is available under the link below:
https://webcasts.eqs.com/dic20200430/no-audio

For more details on DIC Asset AG, visit the company's homepage at www.dic-asset.de.
 

About DIC Asset AG:

With more than 20 years of experience on the German real estate market, the company maintains a regional footprint on all major German markets through six branch offices, and has 186 assets with a combined market value of c. EUR 8.4 billion under management (as of 31/03/2020).

Taking an active asset management approach, DIC Asset AG employs its proprietary, integrated real estate management platform to raise capital appreciation potential company-wide and to boost its revenues.

In its Commercial Portfolio division (EUR 1.9 billion in assets under management, as of 31/03/2020), DIC Asset AG acts as proprietor and property asset holder, and thus generates revenues both from the management of the assets and through the value optimisation of its own real estate portfolio.

In its Institutional Business division (EUR 6.5 billion in assets under management, as of 31/03/2020), which operates under the name GEG German Estate Group, DIC Asset AG generates income from structuring and managing investment vehicles with attractive dividend yields for national and international institutional investors.

DIC Asset AG has been SDAX-listed since June 2006.
 

IR Contact DIC Asset AG:
Peer Schlinkmann
Head of Investor Relations & Corporate Communications
Neue Mainzer Strasse 20
D-60311 Frankfurt am Main
Phone +49 69 9454858-1492
ir@dic-asset.de


DIC Asset AG at a Glance

Financial ratios, in EUR million	Q1 2020	Q1 2019
Gross rental income	26.0	24.5
Net rental income	22.6	21.2
Real estate management fees	20.4	9.2
Net proceeds from disposal of investment property	9.5	11.2
Total income	61.5	50.6
Profits on disposal of investment property	2.5	1.2
Share of the profit or loss of associates	2.7	2.4
Funds from operations (FFO)	26.4	17.0
EBITDA	36.0	27.2
EBIT	26.8	19.7
Profit for the period	16.1	9.2
Cash flow from operating activities	15.4	9.8
Financial ratios per share, in EUR*	Q1 2020	Q1 2019
FFO	0.34	0.24
Profit for the period	0.21	0.13
EPRA earnings	0.30	0.21

 

Balance sheet ratios, in EUR million	31/03/2020	31/12/2019
Loan-to-value (LtV) in %**	45.0	47.8
Investment property	1,614.6	1,623.0
Total equity	1,082.1	968.8
Financial debt	1,587.7	1,547.2
Total assets	2,798.5	2,657.4
Cash and cash equivalents	342.0	351.2
EPRA NAV per share (in EUR)*	17.33	17.23
Adjusted NAV per share (in EUR)*	21.91	22.26

 

*All per-share figures adjusted according to IFRS (Total no. of shares Q1 2020: 77,396k; Q1 2019: 70,526k)
** Not including warehoused assets

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